(WASHINGTON, D.C.) – A new federal regulation would allow temporary federal employees to qualify for health coverage more quickly, but may violate current law which excludes temporary employees from receiving health benefits before one year of current continuous employment. U.S. Senator Tom Coburn, M.D. (R-OK) sent a letter to Director Archuleta, head of the Office of Personnel Management (OPM), expressing his concerns and raising questions of the legality with the proposed rule. The text of the letter is below:

August 28, 2014

Katherine Archuleta

Director

Office of Personnel Management

1900 E Street, N.W.

Washington, DC 20415-1000 

Docket No.: 2014-17806 

Dear Director Archuleta: 

I am concerned about the July 29, 2014, proposed rule providing for health benefits for some temporary federal employees.  

This rule would allow certain types of temporary, seasonal, and intermittent federal employees to qualify for health coverage under the Federal Employees Health Benefits Program (FEHBP).  Eligible workers would also receive a full government contribution towards their premiums.  Avoidance of the penalty under the employer mandate of the Patient Protection and Affordable Care Act appears to be a key reason the Office of Personnel Management (OPM) is moving forward with the proposal.  The proposed rule discusses at length how the federal government will be subject to the mandate’s penalty if any full-time worker receives a subsidy for health insurance through an exchange.  

I am concerned the proposed rule may be inconsistent with current federal law, which appears to prohibit eligibility of temporary employees for both the FEHBP and full government contribution under the conditions you established.  

First, the proposed rule would allow temporary employees to qualify for the FEHBP after a 90-day waiting period, even though federal law only provides for eligibility after “1 year of current continuous employment, excluding any break in service of 5 days or less.”[1]  Only under these conditions can OPM “prescribe regulations to provide for offering health benefits plans to temporary employees.”[2]  

Second, the proposed rule would allow the government to make a full contribution to the premiums for such FEHBP coverage, even though federal law states, “[T]he employing agency of any such temporary employee shall not pay the Government contribution under the provisions of section 8906.”[3]

Ironically, OPM reaffirms these policies in the background of the proposal: “Currently, most employees on temporary appointments become eligible for FEHBP coverage after completing one year of current continuous employment and, once eligible for coverage, do not receive an employer contribution to premium” (page 43969). 

Your department has previously acknowledged legal limitations of extending coverage under the FEHBP.  Before a congressional hearing in 2010, Angela Bailey (now OPM’s Chief Operating Officer) said, “[OPM] took a very good, close look at both our regulations and the law.  And the way the law is currently written, it is written in such a way that it excludes temporary employees from receiving health benefits...After 1 year, even temporary employees are eligible to apply for health benefits as long as they pay the 100 percent contribution of that” (emphasis added).[4]  From my understanding, OPM has held this view for decades.[5]

I respectfully request you submit answers to the following questions about OPM’s decision to move forward with a policy that may contradict federal law:

1. Does OPM agree current federal law prohibits temporary employees from qualifying for health benefits coverage before one year of continuous service?  Please provide a copy of OPM’s legal analysis used to conclude this element of the proposed rule is consistent with current law.
2. Does OPM agree current federal law prohibits temporary employees from receiving a government contribution toward the premiums for any such coverage?  Please provide a copy of OPM’s legal analysis used to conclude this element of the proposed rule is consistent with current law.
3. Has OPM’s understanding of federal law changed since it took a “very good, close look at both [OPM] regulations and the law” [6] and concluded it had no authority to expand existing health benefits available to temporary employees?  If so, please describe which laws if any enacted since 2010 have given OPM authority to expand availability of such benefits.
4. Please provide copies of all analyses, memoranda, and emails discussing the legality of this proposed rule. 
5. The proposed rule states, “Once an employee is enrolled under paragraph (j) of this section, eligibility will not be revoked, regardless of his or her actual work schedule or employer expectations in subsequent years.”  Under this practice, temporary, intermittent, and seasonal employees may work significantly less than full-time and still receive coverage under the FEHBP.  Please describe how OPM expects an agency to withhold an employee’s health insurance contribution if he or she did not receive a wage sufficient to cover the employee contribution in a given pay period.
6. Has OPM requested any legislative changes related to health benefits coverage of temporary employees in any of the last five budget requests or through other means?

I appreciate your diligence in further evaluating the legality of the proposed rule and ask you respond to this inquiry by September 30, 2014. 

Sincerely,

Tom A. Coburn, M.D.

Ranking Member